are you fucked without credit as a business man? Could use insight

[Matsuo Munefusa]

as a business person are you completely fucked without the ability to take out a loan? I don't have that ability as I have been a private contractor for 8 years now running (no steady income) and I have huge college debts that destroy my income:debt ratio (so banks won't touch me).

I do want to take out a loan though and go into some business venture with a friend....but is the only way to get a loan privately then (private investors?)?

Or do I just need to save the capital on my own and back myself (that will be tough)?

Ideas for somebody with a business venture but without the ability to take on credit?

 

[Pekkerwood]

The fact is, getting business loans can be difficult with great credit. Virtually no lender will loan you money for a new business venture outside of the SBA loans. Much too risky as the majority of businesses fail.

I have been involved in private equity for close to two decades now and am amazed at how hard it is for new companies to access credit markets. Typically personal credit is what banks are lending on when lending to new businesses. I get offers constantly now for $50k funding etc now that I dont need it!

I done both some "Angel Investing" as well as lending for some local companies. I look for a sound business plan that includes not just projections but cash flow analysis and identification of major and minor risk factors that could affect the business.

I like to hear a well articulated "competitive advantage" that will propel the business. It helps if the borrower knows how to read a balance sheet and Profit and Loss statement. An idea of customer acquisition methods and cost is valuable.

If you are not borrowing against collateral, very few avenues will be open to you other than people you know who believe in you. Even if you are honest, hardworking, brave and have a great idea, what if you get hit by a truck? How will a lender be paid back?

I would be happy to address specific questions as best I can. I do not purport to be an expert in this field, but can share my experiences.

 

[Matsuo Munefusa]

Thanks man, thats what I have been finding out recently through some more investigation. I've kind of tabled it for awhile as we are in the process of building a house so I really cannot get too extended with another business now let alone the commitment of a loan.

Perhaps in 2019 I can re-open this line of thinking, however by then hopefully my own investments I am making now will have created independent wealth and I can pursue this project without needing a loan :lightbulb: